Oldies on Newstart spark pension alarm

Jonathan Swan, Fergus Hunter

New data shows a spike in older Australians registering for unemployment benefits amid plans to lift the pension age to 70.

The number of Australians aged over 50 receiving the Newstart unemployment allowance grew more than 40 per cent between 2010 and 2013. This dramatically outweighs the 8 per cent growth in the over 50s general population across the same period.

Recently Treasurer Joe Hockey confirmed he wanted to increase the pension age to 70 from 2035, up from the current threshold of 65.

The increase in Newstart to older workers while pushing out the pension age poses long-term challenges to the budget, with the prospect of many Australians signing up for unemployment payments in their 50s and 60s as they wait to become eligible for the pension.

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The data, released by the Department of Human Services to the Greens, reveals nearly 200,000 Australians in their 50s and 60s are on Newstart. The recent spike is "alarming" given the expected changes to the pension age, says Greens senator Rachel Siewert.

"We're now on the verge of a series of cruel budget cuts that have the potential to dump more people on to Newstart," Senator Siewert said. "Rather than working to address these issues, the government is planning a series of cuts and making people work until they're 70."

Social Services Minister Kevin Andrews says several factors have contributed to the rapid rise in older people applying for Newstart.

"Labor's changes to the Parenting Payment . . . pushed tens of thousands of people on to Newstart Allowance, including some people over the age of 50," Mr Andrews said.

And an increase in the pension age for women from 64.5 to 65 from July 2013 last year meant more women stayed on Newstart for longer in the second half of last year, he added.

Newstart is available to unemployed Australians aged over 22 who are looking for work and meet an income and asset test.

The Greens support various policy initiatives to address the issue, such as a National Mature Age Employment Plan, reducing barriers for older job seekers and investigating the adequacy of Newstart.

Meanwhile, older Australians suggest they are open to pushing wealthy pensioners off government payments but have warned the Abbott government against including the family home in an assets test.

A survey of more than 6500 Australians aged over 50, by the consumer action group the Fifty Up Club, provides clues about what changes would be accepted and what would be rejected in the Abbott government's first budget.

In a clear warning to Mr Hockey, more than 45 per cent of respondents said they would sell their home and move into a cheaper property if the family home was no longer exempt from the pension assets test.

Keenly aware of the political dangers of meddling with the pension, Mr Hockey will not make any changes to the family home test, despite his desperation to control Australia's $40 billion-a-year – and fast growing – aged pension costs.

But other results in the poll suggest older Australians are open to the "tough" decisions foreshadowed by Mr Hockey to repair the budget and return it to surplus within a decade.

Asked whether a couple should qualify for a part-pension if they owned their family home, had more than $1 million in assets and received $60,000 a year in income, more than 70 per cent of respondents said: "No".